Fact Sheet on Free Trade and Thailand
Fact Sheet: President Bush Announces United States Intends to Negotiate a Free Trade Agreement with Thailand

President Bush Announces United States Intends to Negotiate a Free
Trade Agreement with Thailand

Presidential Action

Today, President Bush announced that the
United States intends to negotiate a Free Trade Agreement (FTA) with
Thailand. The elimination of the wide array of tariff and non-tariff
barriers is expected to increase U.S. exports, particularly of
agricultural goods and a range of services, and expand opportunities
for American farmers, workers, consumers and businesses.

Thailand is a strong and valued ally on economic, military,
security and political matters. The announcement that the United
States and Thailand intend to launch FTA negotiations is a recognition
of the progress both countries have made in deepening trade relations
during the past year. Thailand is prepared to negotiate an agreement
that contains the comprehensive coverage and high standards that the
United States seeks.

U.S.-Thai Trade Relations: Thailand is the United States' 18th
largest trading partner, with two-way trade totaling nearly $20 billion
in 2002. Thailand is the 16th largest market for U.S. agricultural
exports and 23rd largest market for overall U.S. exports. Top U.S.
exports to Thailand include machinery, agricultural products, and
aircraft. In 2002, the United States and Thailand signed a Trade and
Investment Framework Agreement that has paved the way for the start of
FTA negotiations.

Benefits of an FTA: A U.S.-Thailand FTA would:

" Promote U.S. Exports: The United States exported $4.9
billion to Thailand in 2002. An FTA will help increase U.S. exports to
Thailand. Although Thailand has liberalized its trade and investment
regime over the past several years, its average tariffs remain
relatively high at about 16 percent. Through FTA negotiations, the
United States will aim to eliminate these tariffs as well as
substantially reduce Thailand's significant non-tariff barriers,
creating new and substantial opportunities for American businesses. An
FTA would particularly benefit American farmers, who currently face
tariffs in Thailand averaging 35 percent in addition to an array
non-tariff barriers. Other U.S. sectors that would likely benefit from
an FTA with Thailand include autos and auto parts, given that
Thailand's tariffs on these goods run as high as 80 percent.

" Protect U.S. Investment: An FTA would preserve the
preferential status of U.S. investments under the U.S.-Thailand Treaty
of Amity and Economic Relations (AER). The AER covers over 1,000 U.S.
businesses in Thailand. Total U.S. investment in Thailand is about $20
billion.

" Build on Enterprise for ASEAN Initiative and U.S. -Singapore
FTA: President Bush announced the U.S. Enterprise for ASEAN Initiative
(EAI) in October, 2002. This initiative offers the prospect of
bilateral free trade agreements between the United States and ASEAN
countries that are committed to economic reforms and openness. The
goal of EAI is to create a network of bilateral FTAs that will increase
trade and investment, tying more closely together our economies and our
futures. Following on the U.S. -Singapore FTA, a U.S.-Thailand FTA
will advance this ambitious initiative. Two-way trade between the
United States and Singapore and Thailand combined would be close to $53
billion.

Next Steps: The Administration will consult formally with Congress
on a U.S.-Thailand FTA in the coming weeks, pursuant to U.S. Trade
Promotion Authority enacted in 2002. After these consultations, the
Administration will formally notify Congress of its intent to launch
FTA negotiations and outline objectives for the negotiations. Under the
requirements of U.S. Trade Promotion Authority, the Administration
must then allow at least 90 days for additional consultations before
initiating negotiations. During this time, the United States and
Thailand will continue to make progress on outstanding bilateral trade
issues under their Trade and Investment Framework Agreement and related
concerns that will help set the stage for the negotiations to begin in
mid-2004.